Disseminating Cost Information Through a Corporate Intranet: A Case Study and Lessons Learned

Disseminating Cost Information Through a Corporate Intranet: A Case Study and Lessons Learned

Rajiv Kohli (University of Notre Dame, USA) and David Ziege (Holy Cross Health System, USA)
DOI: 10.4018/978-1-878289-65-0.ch008
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Abstract

Changes in the healthcare business resulting from capitation and declining reimbursement have led to cost-cutting measures in all areas of healthcare delivery. In some cases, the failure of healthcare organizations to reduce costs can threaten their financial viability. The difficulty remains in identifying how and where to cut costs. In order to target cost-cutting measures, it is critical to get an accurate cost of chargeable items that take into account the activities and resources incurred in producing those chargeable items. With the change in the market conditions resulting in managed care such as prospective payment system (PPS) and capitation contracts, the focus of managerial accounting has shifted from reporting, budgeting and planning to analysis of contracts and operations (Heshmat, 1997). Cost information is now an integral part of the decision making and is being used by department managers more than ever before (Eastaugh, 1987). However, this is not always the case because many cost information systems (CIS) were designed for reporting and they inadequately met the emerging demands for costs such as activity-based costing.

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